Long-term U.S. mortgage rates hold steady at 3.55%
The average rate on 15-year fixed-rate mortgages, popular among those refinancing their homes, edged up.
SILVER SPRING, Md. (AP) — Average long-term U.S. mortgage rates were essentially flat this week after jumping nearly a half percent the past two weeks as lenders anticipated the Federal Reserve’s announcement of pending rate increases.
The average rate on the 30-year loan ticked down to 3.55% from 3.56% last week, mortgage buyer Freddie Mac reported Thursday. It stood at 2.73% a year ago.
The average rate on 15-year fixed-rate mortgages, popular among those refinancing their homes, edged up to 2.80% from 2.79% last week. One year ago, the rate was 2.2%.
Though they remain historically low, home loan rates have been rising to levels not seen since early 2020, when the coronavirus pandemic was breaking in the United States.
On Wednesday, the Fed signaled that it would begin a series of interest rate hikes in March, reversing pandemic-era policies that have fueled hiring and growth but also adding to inflation levels not seen in some 40 years.
Earlier this month, the government reported that inflation spiked to 7% in December from a year earlier, the sharpest increase in four decades. In addition, the Labor Department reported that prices at the wholesale level surged by a record 9.7% last month from December 2020.
The Fed’s upcoming rate hike — or hikes — will make it more expensive to borrow for a home, car or business.
In addition to surging inflation, experts expect robust economic growth and the tight labor market to continue to push rates higher.
Freddie Mac economists expect higher mortgage rates to bring a modest decline in purchasing demand ahead of the spring homebuying season.
Available housing has been sparse since long before the pandemic started, and rising prices are making it even harder for home buyers to secure a new home.
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